Encompass filed suit against Blue Cross for violations of the Employee Retirement Income Security Act (ERISA), breach of contract, defamation, and tortious interference with business relations. After Blue Cross largely prevailed at trial, the district court granted a new trial because of error in the jury charge. At the second trial, Encompass prevailed on all claims.
The Fifth Circuit held that charging the jury with an incorrect standard of liability supported granting a new trial, and thus the district court did not abuse its discretion by granting Encompass a new trial on the breach of contract claims. The court also held that the district court did not abuse its discretion by granting a new trial on the tort claims considering the interdependence of the tort and contract issues. Finally, the court held that the application of contra non valentem was not wrong as a matter of law, and Blue Cross abused its discretion by arbitrarily denying Encompass's claims for covered services under ERISA. View "Encompass Off Solutions, Inc. v. Louisiana Health Service & Indemnity Co." on Justia Law

Jarvis Properties, a limited partnership, owns a parcel of land. Its general partners, Todd and James (brothers), each own a 50 percent interest in the partnership, which is less than the majority consent required to act on behalf of the partnership (Corp. Code, 15904.06(a)). The brothers cannot agree on what to do about the parcel. Their partnership agreement does not address decision-making deadlocks. James sought partition by sale, naming Todd and Jarvis Properties as defendants. Todd hired his own lawyer and hired a separate lawyer, Roscoe, to represent the partnership. James objected to having Roscoe represent the partnership and moved to disqualify Roscoe. James argued that Roscoe was not authorized to act by the requisite majority of the general partners and that Roscoe, who took the position that he was not subject to the direction of either partner and was being paid by Todd, was not acting in the best interests of the partnership and would run up unnecessary litigation costs and deplete the partnership’s limited assets. The court of appeal affirmed an order disqualifying Roscoe. James had a sufficient interest to challenge Roscoe’s authority, having demonstrated a risk that Roscoe's representation may advance Todd’s interests and may not be in the Partnership's best interests. On remand, the court may wish to explore options for resolving deadlock at the entity level and consider appointing a receiver or other neutral. View "Jarvis v. Jarvis" on Justia Law

The Court of Chancery granted Defendant’s motion to dismiss Plaintiff’s complaint to vacate or modify an arbitration award for failure to state a claim, holding that there was no reasonably conceivable evident material miscalculation or evident material mistake in the arbitrator’s report.
In 2017, Plaintiff and Company entered into a Securities Purchase Agreement. In 2018, under the dispute resolution provision of the agreement, Plaintiff and the Company engaged in mandatory, binding arbitration regarding the Company’s total accounts receivable reserve (the Total AR Reserve). The arbitrator issued a report determining the Total AR Reserve was $661,165. Plaintiff then filed a complaint to vacate or modify the arbitration award, arguing that the arbitrator made an evident material miscalculation or evident material mistake in his determination of the Total AR Reserve. The Court of Chancery disagreed and granted Defendant’s motion to dismiss. View "CLP Toxicology, Inc. v. Casla Bio Holdings LLC" on Justia Law

The Supreme Court reversed the order of the circuit court certifying as final the prior orders that granted summary judgment to Respondents in this civil action arising out of the modification of covenants pertaining to a residential subdivision developed by RJM Holdings, LLC, holding that the genuine issues of material fact precluded summary judgment.
On appeal, Petitioners argued that the circuit court erred by granting summary judgment because genuine issues of material fact existed regarding whether Respondents were engaged in a joint venture with RJM to develop the subdivision and whether the corporate veils of the respondent businesses should be pierced to hold certain individuals personally liable. The Supreme Court agreed and reversed, holding that genuine issues of material fact existed with respect to the conduct of Respondents and the use of the various business entities to develop the subdivision. View "Dailey v. RJM Holdings, LLC" on Justia Law

At the summary judgment stage, the district court found that an employee of Greenwald Neurosurgical, P.C. caused over $100,000 in losses to the P.C., while he was acting in the ordinary course of the P.C.’s business. The district court then issued a judgment to the P.C. for the policy amount of $100,000 pursuant to a Dishonesty Bond issued by Western Surety Company. Western appealed the district court’s determinations that the employee caused the loss while acting in the ordinary course of business and that the P.C. actually suffered the loss. The P.C. cross-appealed the district court’s findings that it was the only entity insured under the bond and argued it was awarded too little by way of attorney’s fees. The Idaho Supreme Court determined: (1) the district court correctly concluded that only the P.C. was an insured and the only entity that could recover under the bond; (2) whether the employee was acting the “ordinary course of [the P.C.’s] business” was a jury question; (3) a genuine issue of fact existed regarding the amount of losses the P.C. sustained; and (4) the district court erred in awarding attorney’s fees to the P.C. The Supreme Court therefore vacated summary judgment, and remanded for further proceedings. View "Greenwald v. Western Surety" on Justia Law

PetroChina Canada bought ten large heat-exchanger units from Kelvion’s Oklahoma plant for use in PetroChina’s oil and gas operations. Their contract included a mandatory forum-selection clause subjecting the parties to Canadian jurisdiction. After a dispute over unanticipated delivery costs that PetroChina refused to pay, Kelvion brought suit in Oklahoma. It asserted quantum meruit and unjust enrichment claims, arguing the forum-selection clause did not apply to its equitable claims. The district court disagreed, concluding the forum-selection clause applied, and dismissed the suit under the doctrine of forum non conveniens. Finding no error in judgment, the Tenth Circuit affirmed the district court’s dismissal for forum non conveniens. View "Kelvion, Inc. v. PetroChina Canada Ltd." on Justia Law

Kreg, a medical-supply company, contracted with VitalGo, maker of the Total Lift Bed®, for exclusive distribution rights in several markets. A year and a half later, the arrangement soured. VitalGo told Kreg that it had not made the minimum‐purchase commitments required by the contract for Kreg to keep its exclusivity. Kreg thought VitalGo was wrong on the facts and the contract’s requirements. The district court ruled, on summary‐judgment that VitalGo breached the agreement. The damages issue went to a bench trial, despite a last-minute request from VitalGo to have it dismissed on pleading grounds. The court ordered VitalGo to pay Kreg about $1,000,000 in lost‐asset damages and prejudgment interest. The Seventh Circuit affirmed, upholding the district court’s rulings that the agreement allowed Kreg to make minimum-purchase commitments orally; that the minimum‐purchase commitment for the original territories was made in December 2010; that VitalGo breached the agreement by terminating exclusivity in June 2011 and by failing to deliver beds in September 2011; and concerning the foreseeability of damages. View "Kreg Therapeutics, Inc. v. VitalGo, Inc." on Justia Law

COR, a securities clearing and settlement firm, filed suit against Calissio seeking to recover losses resulting from a dividend transaction that it has not already recovered in other proceedings. The Eighth Circuit affirmed the district court's grant of summary judgment dismissing all claims against SST (the transfer agent) and the Broker Defendants. The court held that the transfer agent had no knowledge of a misrepresentation in the use of a seemingly appropriate "CUSIP" number for additional shares of the same class as existing shares and the transfer agent reasonably relied on attorney opinion letters in issuing the new shares. Furthermore, COR failed to show it reasonably relied on the transfer agent's alleged misrepresentation. Accordingly, the transfer agent was entitled to judgment on plaintiff's fraudulent misrepresentation claims.
The court also held that the district court properly dismissed claims against the Broker Defendants. In this case, COR has no conversion claim against the Broker Defendants, who simply acted as pass-through agents of the buyers in receiving and distributing due bill credits. Likewise, COR's unjust enrichment claim failed because the Broker Defendants received due bill credits from DTC for the benefit of their account holders and passed the benefit to their account holders without delay. View "COR Clearing, LLC v. Calissio Resources Group, Inc." on Justia Law

The Supreme Court affirmed the district court’s order on summary judgment motions and order after bench trial in this dispute arising from an ill-conceived business conveyance plan during a downturn in the oil market, holding that the district court did not err or abuse its discretion in any respect.
Three Garland brothers, who had separate entities providing specialized services to the oil industry, formed a company with their companies as members and the Garlands individually as members. Alex Mantle was president of the company. Mantle and the Garlands later entered into a memorandum of understanding (MOU) providing that Mantle and his wife would buy the company, but Mantle backed out of the deal. The Garlands liquidated the company, and this litigation followed. The district court disposed of some claims on summary judgment and resolved the remainder after a bench trial. The Supreme Court affirmed, holding (1) the Garlands and their entities did not abandon their counterclaims; (2) the MOU was an enforceable contract; (3) the district court correctly dismissed the Mantles’ fraud claim; (4) the district court correctly concluded that some conveyances by the Garlands fit the definitions of a fraudulent conveyance; (5) the elements for LLC veil-piercing were absent; and (6) the Garlands did not owe Mantle a duty of good faith. View "Garland v. Mantle" on Justia Law